Govt rules out referring Banking Bill to House panel again

New Delhi: Finance Minister P Chidambaram Wednesday ruled out the possibility of referring the Banking Bill for the second time to the Standing Committee on Finance for further scrutiny as has been demanded by opposition parties.

"No. There is only one clause and that is based on recommendation of Standing Committee on Food and Consumer Affairs. I have used Rule 80 (of Parliament procedures)," Chidambaram said when asked if there was a possibility of the Banking Bill being sent back to the House panel.

"I met both leaders of opposition (Sushma Swaraj and Arun Jaitley) yesterday and I explained to them that nothing new has been done. One new section has been introduced based on report of Standing Committee on Food and Consumer Affairs. They wanted a provision to be introduced," he said.

The Banking Laws (Amendment) Bill, 2011, was taken up in the Lok Sabha on Monday, but no discussion could take place in view of protest by the opposition.

The opposition parties, including BJP, demanded that the Bill be referred again to the Standing Committee on Finance.

As per a clause inserted into the Bill, which paves way for RBI to issue new banking licences, the banks would be allowed to participate in commodity futures trading.

Chidambaram said: "Just as the Standing Committee on Finance made recommendation, that committee (Standing Committee on Food and Consumer Affairs) made recommendation on one matter ... Accepting that recommendation, one new clause has been introduced and to introduce one new clause that is why Rule 80 is there.

"... When I explained this to the two leaders of Opposition they understood what I have said. They said they will discuss with their party (colleagues)."

On the possibility of dropping the clause from the Banking Bill, Chidambaram said, "But why? I have accepted another Standing Committee (on Food and Consumer Affairs Ministry) recommendation. There is only one clause".

The Banking Bill also seeks to raise the voting rights of investors in private sector banks to 26 percent from 10 percent. It also allows RBI to supercede boards of private sector banks and increase the cap on voting rights of private investors in public sector banks to 10 percent, from one percent.